Frequently Asked Questions

The Organisation

What is the Institute for Economics and Peace?
The Institute for Economics and Peace (IEP) is an independent, non-partisan, non-profit think tank dedicated to promoting a better understanding of the social and economic factors that develop a more peaceful society.

IEP achieves its goals by developing new conceptual frameworks to define peace; providing metrics for measuring peace; and, uncovering the relationship between peace, business and prosperity.

IEP has offices in Sydney, New York, Mexico City and Oxford. It works with a wide range of partners internationally and collaborates with intergovernmental organizations on measuring and communicating the economic value of peace.

IEP’s ground-breaking research includes the Global Peace Index (GPI), as well as a series of country-specific peace indices, including the Mexico Peace Index (MPI), United States Peace Index (USPI), and the United Kingdom Peace Index (UKPI).

When was IEP established and why?
IEP was established in 2008 in order to study the relationship between business, peace, and economic development and to provide tools for understanding and analysing the value of peace. IEP grew out of a key finding of the Global Peace Index (first published in 2007) – that there is a significant relationship between peacefulness and national wealth.

Peace is the focus of IEP’s research because it is an essential prerequisite to foster the economic, political, social, and cultural institutions which enable human potential to flourish. Without peace we cannot collectively achieve the levels of cooperation, inclusiveness, and social equity needed to solve the major global sustainability challenges facing humanity.

In spite of the evident importance of peace, it remains a poorly understood and nascent area of study in the social sciences. While there is a burgeoning literature on conflict and war, there is in fact comparatively little research on peace. IEP’s ambition is to go beyond crude measures of war and to systematically explore the drivers, determinants, and texture of peace. By establishing new conceptual frameworks to measure and quantify peace, IEP aims to facilitate future research to better understand the mechanisms that nurture and sustain peace. By doing so, we can help inspire and influence citizens and governments to positive action.

How is IEP funded?
IEP is a registered Australian charity (not-for-profit). IEP USA is a 501 c (3) status tax exempt organisation. It was founded by Australian entrepreneur and philanthropist Steve Killelea, who provided initial funding to establish and operate the Institute.

The Research

What is the Global Peace Index?
The GPI is the leading objective measure of the relative peacefulness of the world’s nation states. It ranks 162 countries according to their levels of peace (defined, for this purpose, as the absence of violence) and provides several unique data metrics for identifying the presence of peace. The GPI is guided by an independent international panel of experts of scholars from leading academic and non-government institutions. It was launched in 2007 and is published annually.

How is the GPI calculated?
The methodology of the GPI was developed through a three-tiered structure in order to ensure the independence and integrity of the Index. The choice of indicators and their weightings is overseen and continuously reviewed by the international panel of independent experts, in collaboration with IEP and the Economist Intelligence Unit, which collates and calculates the Index.

The GPI is composed of 22 qualitative and quantitative indicators from highly respected sources that measure both internal and external factors. All of the indicators are banded on a scale of 1-5 and qualitative indicators are scored by the Economist Intelligence Unit’s extensive team of country analysts.

The indicators are divided into three key thematic categories:
• 5 measures of ongoing conflict such as number of conflicts fought and number of deaths from organized conflict.
• 10 measures of societal safety and security such as number of displaced people, potential for terrorist acts, number of homicides, number of jailed population.
• 7 measures of militarization such as military expenditure, number of armed service personnel, ease of access to small arms and light weapons.

The overall score is weighted 60% for internal peace and 40% for external peace. The closer the score is to ‘1’, the more peaceful the country is, with scores closer to ‘5’ indicating relatively less peace.

The GPI is then tested against a range of potential drivers or determinants of peace encompassing standards of governance and efficiency; the strength of formal and informal institutions and the political process; international openness; demographics; regional integration; religion and culture; and education and material well-being.

Changes in scores and ranks between 2007-2013 data

Scores are consequently subject to change as new data becomes available. As a result, country rankings and scores may change as the methodology is refined and estimates are updated. For this reason, country rankings may differ where comparisons are made across different years. The most up to date data can be found on the interactive Global Peace Index map on Vision of Humanity.

Where is the data sourced from?

The GPI sources the latest available data from a wide range of international sources, including the International Institute of Strategic Studies, the World Bank, the Stockholm International Peace Research Institute, various UN entities, including the UN Office of Drugs and Crime, peace institutes, and Economist Intelligence Unit country analysts, among others.

How is the GPI used?

The GPI informs the work and goals of a range of stakeholders. Governments use this tool to structure policy considerations and for tourism promotion and country branding. Academics look to the unique data sets for further research, to enhance existing work, and to integrate into university coursework. NGOs examine the GPI to inform their campaigns, help them select areas of focus for their program, and to evaluate risk. The private sector uses the GPI to identify the financial incentives of peace and to form industry alliances to positively influence government policy. The GPI is also a tool that can be used to further inspire philanthropic support of the study of peace.

Why are certain indicators given greater weight in the GPI?

IEP, the Economist Intelligence Unit, and the international panel of independent experts agreed that indicators should be weighted differently because each factor has subtlety variant contributions to peacefulness. For example, the outcome of an incidence of direct violence is given a greater weight than the society’s perception of criminality.

Why is internal peace given a stronger weight than external peace?

The international panel of experts rigorously debated the weightings and came to the agreement that internal drivers in reality have more bearing on peace than external drivers. The panel based this decision on the concept that peace begins at home and that nations more at peace within their own borders are less inclined to violence with neighbouring countries.

How is the measurement of the qualitative indicators determined?

All indicators in the GPI are expressed quantitatively as a score between 1 and 5. However, for certain indicators, lack of data means determination of the rating requires a qualitative assessment. Each of qualitative measure is evaluated by an EIU country expert, which is then peer-reviewed by a regional team and checked by a global review team at the EIU. Finally, the qualitative scores are then separately reviewed by the international expert panel.

Do military expenditures reflect negatively on a country’s peacefulness in the GPI?

The Index does not seek to make value judgments about the efficacy or desirability of a particular level of military expenditure. The rankings in the GPI are based on a relative measure to other countries, not on an arbitrary or idealised level. As it is recognized that violent criminals may need to be incarcerated, it is also recognized that nations with violent neighbours may require a strong military to defend themselves.
The GPI provides an analytical base on which to consider the opportunity cost of spending under the defence umbrella. For instance, a very high percentage of military spending beyond the average of other countries will rate more poorly, while financial contributions to UN peacekeeping forces is rated positively.

According to the GPI, how are peace and economic growth related?

While the GPI links peace to prosperity, it also links peace to other factors. Economics and peace are not always in tandem — all the countries at the top of the GPI have high GDP per capita levels, however so do some near the bottom of the index. What has been clearly established is that a sound business environment is closely linked to a country’s peacefulness.

How were the economic models for peace developed?

In order to calculate the global monetary value of peace, IEP commissioned economic modelling by economists Prof Jurgen Brauer at Augusta State University and John Tepper-Marlin, former Senior Economist with the Joint Economic Committee of the U.S. Congress. The Brauer and Tepper-Marlin economic model calculates both the cost of violence and the additional productivity value of increased peacefulness. This includes two global peace dividends – the static peace dividend and the dynamic peace dividend.

The static peace dividend refers to the reallocation of resources from violence to peace. For instance, a factory used to build tanks is instead used to builds trucks. The dynamic peace dividend accounts for the effects that accrue when previously unharnessed economic resources are released.

From this study the IEP developed a new methodology to annually estimate the cost of violence to the global economy. This groundbreaking research uses the concept of ‘violence containment’ spending IEP defines violence containment spending as economic activity that is related to the consequences or prevention of violence where the violence is directed against people or property.  

Is the GPI an investment tool?

The GPI provides a framework to understand the relationship between peace, markets, costs, and profits, enabling companies to better understand their ”risk and opportunity profile” and business development opportunities.

While the GPI and related research shows that there is a tremendous economic opportunity with peace, the GPI can be used for policy, research, advocacy, and investment.

Is the GPI predictive of violent conflict?

The GPI is not a forecasting tool as the majority of indicators are backward looking indicators which provide data on the existence of direct violence in countries. By understanding the prevalence of direct violence and conflict, it is possible to then measure the common structures and institutions which characterise peaceful societies.

Are the countries at the bottom of the GPI to blame for their score?

The GPI does not place a moral or value judgment on where countries are ranked in the index. There can be many reasons why a country is ranked lower than another, and sometimes these are not dependent on the country itself but on the actions of its neighbours. The GPI measures the levels of peacefulness in order to be able to understand what leads to peace and further our understanding of peacefulness.

What are the “Pillars of Peace”?

The “Pillars of Peace” represent a new conceptual framework for understanding and describing the factors that create a peaceful society. This framework has been derived from an empirical and statistical analysis of the GPI. Over 3000 cross- country datasets were used to define the key economic, political, and cultural determinants that foster the creation of a more peaceful society. The eight interdependent pillars are:

• Well-functioning government
• Sound business environment
• Equitable distribution of resources
• Acceptance of the rights of others
• Good relations with neighbors
• Free flow of information
• High levels of education
• Low levels of corruption

Why are certain countries not included in the GPI?

Countries are not included in the GPI either due to a lack of reliable data on the majority of the indicators, or (1) its population is less than 1 million and (2) its land mass is less than 20,000 square km. Including small countries of this size skews the results of the GPI.

Does the GPI include indicators specifically measuring violence against women and children?

The core 22 indicators do not include specific indicators measuring violence against women or children as there is no consistent, reliable data available for the 162 countries ranked in the GPI. However, there are various gender equality measures which correlate strongly with the GPI.

Why isn’t an indicator measuring domestic violence included in the GPI?

The GPI does not include a specific indicator measuring domestic violence as there is no reliable data available for the 162 countries ranked in the GPI.

Does the GPI include suicide rates as an indicator?

No it does not. The GPI focuses on violence perpetrated by one person or state on another.

Why isn’t an indicator measuring child abuse included in the GPI?

The GPI does not include a specific indicator measuring child abuse as there is no reliable data available for the 162 countries ranked in the GPI. The number of homicides per 100,000 people is measured, which includes infanticide.

Why isn’t an indicator measuring animal abuse included in the GPI?

The GPI focuses on violence perpetrated by one person or state on another.

Which national peace indices has IEP produced?

In April 2011, IEP released the first-ever United States Peace Index, ranking the 50 states according to five internal indicators. The second edition of the US Peace Index was released in April 2012.

In April 2013 the United Kingdom Peace Index (UKPI) was released. The Index measures levels of peace according to five key indicators.

In 2013 the Mexico Peace Index was released.

Global Peace Index Peace Indicators

The 22 indicators that make up the GPI.
Measures of ongoing domestic and international conflict
• Number of external and internal conflicts fought
• Estimated number of deaths from organized conflict (external)
• Number of deaths from organized conflict (internal)
• Level of organized conflict (internal)
• Relations with neighbouring countries
Measures of societal safety and security
• Perceived criminality in society
• Number of displaced people as a percentage of the population
• Political instability
• Political Terror Scale
• Terrorist activity
• Number of homicides per 100,000 people
• Level of violent crime
• Likelihood of violent demonstrations
• Number of jailed population per 100,000 people
• Number of internal security officers and police per 100,000 people
Measures of militarization
• Military expenditure as a percentage of GDP
• Number of armed services personnel per 100,000 people
• Volume of transfers (imports) of major conventional weapons per 100,000 people
• Volume of transfers (exports) of major conventional weapons per 100,000 people
• Funding for UN peacekeeping missions
• Nuclear and heavy weapons capability
• Ease of access to small arms and light weapons

Global Peace Index Related Indicators
The related indicators against which the GPI has been tested, in an attempt to identify the drivers of peace include:
• Electoral process
• Functioning of government
• Political participation
• Political culture
• Civil liberties
• Corruption perceptions
• Women in parliament
• Freedom of the press
• Exports + Imports % of GDP
• Foreign Direct Investment (flow) % of GDP
• Number of visitors as % of domestic population
• Net Migration (% of total population)
• 15-34 year old males as a % of adult population
• Gender ratio of population
• Gender Inequality
• The extent of regional integration
• Current education spending (% of GDP)
• Primary school enrolment ratio (% Net)
• Secondary school enrolment ratio (% Net)
• Higher education enrolment (% Gross)
• Mean years of schooling
• Adult literacy rate (% of pop over 15)
• Hostility to foreigners/private property
• Willingness to fight
• Nominal GDP (US$PPP bn)
• Nominal GDP (US$bn)
• GDP per capita
• Gini Index
• Unemployment %
• Life expectancy
• Infant mortality per 1,000 live births

 

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